Singapore Airlines, rated as one of the world's financially strongest carriers, is to lay-off over 400 workers in what it says is a "last resort" retrenchment measure.

The airline, which has been battered by the global downturn and the SARS outbreak, is trimming 414 ground staff, around 1.5 percent of its Singapore work force.

It is the first time in 20 years that the airline has been forced to retrench but it signalled its intentions to make changes earlier this week.

In a statement, SIA says its has initiated the retrenchment exercise as a last step in response to the current operating environment, following earlier moves to stringently manage costs.

These moves included deferring discretionary spending, freezing recruitment, asking management to accept wage cuts of up to 27.5 percent and introducing compulsory unpaid leave for cabin crew. At the same time, SIA has cut its passenger capacity by over 30 percent since April 1 this year.

"We have always said that we would consider retrenchment as a measure of last resort. I am sad to say that we are now at that point," said Chew Choon Seng, the airline's Chief Executive Officer. "It is unfortunate, but there is no alternative if we are to ensure that the company survives this downturn and position ourselves to compete effectively in the marketplace of the future."

Office staff, airport workers and engineering personnel will all be affected by the job losses.

The airline suffered losses of SGD$370 million (USD$213.5 million) from its operations in April and May. "It is clear that we have to cure this financial haemorrhage... we need to act now to save the company," Mr Chew said.